AT&T announced that as a result of the Obamacare legislation, it will take a $1,000,000,000.00 write off. AT&T is currently getting a $1300.00 per retiree tax free subsidy from us taxpayers. Additionally, they (and many other unionized large corporations) have also been able to apply that “tax free” subsidy as a tax deduction – essentially double dipping to ensure that they can provide drug coverage benefits to retirees that otherwise would be beyond their means.
“AT&T Inc. intends to take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change,” the company said.
Furthermore, AT&T said in the filing that, as a result of this legislation, including the additional tax burden, “AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.”
Let me make this perfectly clear: I don’t feel sorry or badly for AT&T. Anyone that makes a deal with the devil (the government in any form) deserves the hell they will eventually have to pay. As you read through this article please not the possible effects the legislation may have on the retirees already in the system and that it may (most certainly will) impact current workers not yet ready to retire. Also, keep in mind that AT&T is just the first of many companies similarly structured to make a similiar announcement in the future. The most likely candidate to follow suit will be 3M Corporation.
The final consideration is that no company is going to take a one billion dollar write off and not try to make it up some other way. So, you may want to follow AT&T, 3M and others and observe whether or not they consolidate offices/plants to cut costs. If they do, that will also include cuts in employees which will in turn add to unemployment numbers and increases in persons transferring from private insurance to publicly funded insurance. This latter will pressure a stronger need to raise taxes on those of us left with our jobs and companies intact.
In other news:
Hundreds of thousands of jobless Americans could once again face a disruption in their unemployment benefits after Congress failed to extend them on Thursday.
Amid the deepest recession in 70 years, Congress prepared to adjourn for a two-week break without extending jobless programs that are due to expire in coming days.
That could lead to bureaucratic disarray and further hardship for those who depend on the payments to help cover their bills while they look for work.
For the remainder of the story, click here
And finally, for some potentially good news for people looking for a way to strike out on their own, but who have been holding back due to health insurance needs:
With sweeping changes on the way to the nation’s health-care system, one of the many groups of workers that stand to be directly impacted is freelancers, who today make up 30% of the nation’s workforce. Read on…
Ed said:
Yes Rick the short list of the major companies that will be adversely by the additional tax burden for this health care bill will rock our already shaky economy even more, and I am waiting to see the numbers that the small companies come out with.